The Misperceptions Theory of the Short-Run Aggregate Supply Curve Says

question 42

Multiple Choice

The misperceptions theory of the short-run aggregate supply curve says that the quantity of output supplied will increase if the price level

• A)increases by less than expected so that firms believe the relative price of their output has increased.
• B)increases by less than expected so that firms believe the relative price of their output has decreased.
• C)increases by more than expected so that firms believe the relative price of their output has increased.
• D)increases by more than expected so that firms believe the relative price of their output has decreased.

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Definitions:

Cognitive Appraisal

The process of interpreting and evaluating what emotions a person experiences in a particular situation.

Core Self-Evaluations

A personality trait reflecting a fundamental appraisal of one’s own worthiness, competence, and capability in various situations.

Proactive Personality

describes individuals who are naturally inclined to take initiative and effect change in their environments rather than simply reacting to circumstances.

Social Cognitive Theory

A theory of learning and social behavior which proposes that new behaviors can be acquired by observing and imitating others.